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Business ethics

  1. Gihan Aboueleish
  2. Add up all the numbers you circled.  What was your grade? 10? 15? 30? 40?  ……………………………………………..  The lower the score, the more questionable are your ethical principles regarding business activities.  10 is the lowest … 40 is the highest.  Consider why you answered as you did. Business Ethics - Gihan Aboueleish 2
  3. 1. Legality is only a first step 2. Questions to ask: When faced with a potentially unethical action. 3. Management’s role 4. Compliance/Integrity based codes 5. Corporate social responsibility  A definition and stakeholders Business Ethics - Gihan Aboueleish 3
  4. oMore Than Legality oStandards are Fundamental oStem From Individual Business Ethics - Gihan Aboueleish 4
  5. Ethical Unethical Illegal but And Illegal Illegal Legal Legal And But Legal Ethical Unethical Ethical Unethical Business Ethics - Gihan Aboueleish 5
  6. Business Ethics - Gihan Aboueleish 6
  7. Business Ethics: ◦ The principles and standards that define acceptable conduct in business  Social Responsibility: ◦ A business’s obligation to maximize its positive impact and minimize its negative impact on society Business Ethics - Gihan Aboueleish 7
  8. An ethical issue is an identifiable problem, situation, or opportunity that requires a person to choose from among several actions that may be evaluated as right or wrong, ethical or unethical. Did You Know? The most common types of observed misconduct are lying, withholding information, and abusive/ behavior. Business Ethics - Gihan Aboueleish 8
  9. 1. Didn’t believe corrective action would be taken 2. Feared retribution or retaliation from supervisor or management 3. Feared they wouldn’t remain anonymous 4. Thought someone else would report the misconduct 5. Didn’t know who to contact Business Ethics - Gihan Aboueleish 9
  10. Business Ethics - Gihan Aboueleish 10
  11. Conflict of interest  Fairness and honesty  Communications  Business relationships Business Ethics - Gihan Aboueleish 11
  12.  Occurswhen a person must choose whether to advance their own personal interest or those of others Business Ethics - Gihan Aboueleish 12
  13. The heart of business ethics ◦ General values of decision makers Business Ethics - Gihan Aboueleish 13
  14. False and misleading advertising and deceptive personal- selling tactics anger customers and may cause a business to fail. Business Ethics - Gihan Aboueleish 14
  15. Business people must be ethical toward their customers, suppliers, and others in their workplace. Business Ethics - Gihan Aboueleish 15
  16. Are there any potential legal restrictions or violations that could result from the action? ◦ Question: If I do this will it break any laws?  Does your company have a specific code of ethics or a policy on the action? ◦ Question: If I do this will I go against the employee handbook? Business Ethics - Gihan Aboueleish 16
  17. Is this activity customary in your industry?  Are there any industry trade groups that provide guidelines or codes of conduct that address this issue? ◦ Question: If I do this will I violate any trade practices? Business Ethics - Gihan Aboueleish 17
  18. Would this activity be accepted by your coworkers?  Will your decision or action withstand open discussion with coworkers and managers and survive untarnished? ◦ Question: Will my action cause peer acceptance or rejection, or any peer pressure? Business Ethics - Gihan Aboueleish 18
  19. How does this activity fit with your own beliefs and values? ◦ Question: Will my action violate any of my personal ethics, religious beliefs, or social values? Business Ethics - Gihan Aboueleish 19
  20. Individual Managers’ Opportunity: Ethical/Unethical Standards and Codes and Choices and Coworkers’ Compliance in Business Values Influence Requirements Business Ethics - Gihan Aboueleish 20
  21. Formalized rules and standards that describe what a company expects of its employees Did You Know? Written ethics standards are more often found in larger companies than smaller ones. Business Ethics - Gihan Aboueleish 21
  22. The act of an employee exposing the employer’s wrongdoing to outsiders ◦ The media ◦ Government regulatory agencies Business Ethics - Gihan Aboueleish 22
  23. Four Dimensions: ◦ Economic – earn profits ◦ Legal – comply with the law ◦ Ethical  Not just ―for profit‖ only ◦ Voluntary & Charity  Promote human welfare and goodwill Business Ethics - Gihan Aboueleish 23
  24. Voluntary Responsibilities being a “good corporate citizen;” contributing to the community and quality of life Ethical Responsibilities being ethical; doing what is right, just, and fair; avoiding harm Legal Responsibilities obeying the law (society’s codification of right and wrong) Economic Responsibilities being profitable Business Ethics - Gihan Aboueleish 24
  25. 1. Green Mountain Coffee 11. Intel 2. Hewlett-Packard 12. Johnson and Johnson 3. Advanced Micro Devices 13. NIKE 4. Motorola 14. General Mills 5. Agilent Technologies 15. Pitney Bowes 6. Timberland 16. Wells Fargo 7. 17. Starbucks 8. Cisco Systems 18. Wainright Bank & Trust 9. Dell 19. St. Paul Travelers 10. Texas Instruments 20. Ecolab Business Ethics - Gihan Aboueleish 25
  26. 1. Business helped to create many of the social problems that exist today, so it should play a significant role in solving them 2. Businesses should be more responsible because they have the financial and technical resources to help solve social problem Business Ethics - Gihan Aboueleish 26
  27. 4. Social responsibility is necessary to ensure economic survival ◦ Businesses must take steps to help solve the social and environmental problems that exist today Business Ethics - Gihan Aboueleish 27
  28. 1. Participation in social programs gives businesses greater power, perhaps at the expense of particular segments of society. 2. Many people believe that social problems are the responsibility of government agencies and officials Business Ethics - Gihan Aboueleish 28
  29. Organizational relationships with owners and stockholders: ◦ Profit and ROI  Employee relations: ◦ Providing a safe workplace, adequate pay, information about the company, listening to grievances, and treating employees fairly  Consumer relations: ◦ Respecting the rights of customers and providing them with safe and satisfying products Business Ethics - Gihan Aboueleish 29
  30. Environmental issues: ◦ Animal rights ◦ Pollution ◦ Global warming  Community relations: ◦ Responsibility to the general welfare of the community Did You Know? In one year, Americans generated 230 million tons of trash and recycled 23.5 percent of it. Business Ethics - Gihan Aboueleish 30
  31. The right to safety  The right to be informed  The right to choose  The right to be heard Did You Know? John F. Kennedy was the 35th President of the United States. Business Ethics - Gihan Aboueleish 31
  32. Provide advice about ethics to employees and management  Distribute the company’s code of ethics  Take action on ethics violations  Review and modify the code of ethics as needed Business Ethics - Gihan Aboueleish 32
  33. 1. What are the ethical issues involved in giving a customer an award for consumption behavior without notifying him/her first? 2. Do you see this as a potential violation of privacy? Explain. Business Ethics - Gihan Aboueleish 33
  34. How do you explain the emergence of career opportunities in the field of business ethics and social responsibility? 2- 34
  35. 1. What makes ethical decisions so difficult? 2. Many organizations are primarily concerned with earning a profit or a return on their investment. ◦ Does this concern for owners and investors present an ethical dilemma for companies when weighing business decisions that favor employees and/or the general public? 3. The right to be heard is one of the four rights in the consumer bill of rights. ◦ How are some corporations addressing this consumer concern? Business Ethics - Gihan Aboueleish 35
  36. 1. Which of the following has the greatest effect on ethical behavior in organizations? a. authority of an employee’s superiors b. an employee’s perception of the ethics of coworkers and managers c. an employee’s personal beliefs about what is right or wrong d. investors perceptions of ethics 2. Copying someone else’s work and presenting it as your own is: a. ethics b. bribe c. plagiarism d. greenmail Business Ethics - Gihan Aboueleish 36
  37. 3. A code of ethics is: a. a set of formalized rules and standards describing what the company expects of its employees. b. a government legislation enforced by government agencies. c. a set of principles that describe what a person believes is the right way to behave. d. the impact of a business’s activities on society. 4. Which one of the following is NOT one of the four rights provided in John F. Kennedy’s consumer bill of rights? a. right to safety b. right to be inform c. right to sue d. right to choose Business Ethics - Gihan Aboueleish 37
  38. Individual Organizational Environmental oValues oTop Level Mgmt. oCompetition oWork Philosophy oEconomic Background oThe Firm’s Reward Conditions oFamily Status System oSocial/Cultural oPersonality oJob Dimensions Institutions Business Ethics - Gihan Aboueleish 38
  39. Is It Legal? Is It Balanced? How Will It Make Me Feel About Myself? Business Ethics - Gihan Aboueleish 39
  40.  Religious Teachings  Individual Rights  Legislation  Court Decisions Business Ethics - Gihan Aboueleish 40
  41. Compliance-Based ◦ Increasing control and penalizing wrongdoers  Integrity-Based ◦ Define guiding values ◦ Support ethical behaviour ◦ Shared accountability Business Ethics - Gihan Aboueleish 41
  42. 1. Top management support 2. Expectations begin at the top 3. Ethics imbedded in training 4. Ethics office set up 5. External stakeholders informed 6. There must be enforcement Business Ethics - Gihan Aboueleish 42
  43. Three Levels of Social Responsibility Societal Responsibility Stakeholder Responsibility General Profit Responsibility Ecological Customers Employees Public Environment Owners/Stockholders Suppliers/Distributors Public Interest Groups Business Ethics - Gihan Aboueleish 43
  44. The triple bottom line (TBL) focuses corporations not just on the economic value they add, but also on the environmental and social value they add – and destroy.  Triple bottom line is used as a framework for measuring and reporting corporate performance against economic, social and environmental parameters. Business Ethics - Gihan Aboueleish 44
  45. At its broadest, the term is used to capture the whole set of values, issues and processes that companies must address in order to minimize any harm resulting from their activities and to create economic, social and environmental value. This involves being clear about the company’s purpose and taking into consideration the needs of all the company’s stakeholders – shareholders, customers, employees, business partners, governments, local communities and the public. Business Ethics - Gihan Aboueleish 45
  46. Vision: To be the first  Ray Anderson - believes company that, by its deeds, that if Interface, a petro- shows the entire industrial intensive company, can get world what sustainability is it right, it will never have to in all its dimensions: take another drop of oil People, process, product, from the earth. place and profits — by 2020 — and in doing so we will become restorative through the power of influence. Business Ethics - Gihan Aboueleish 46
  47. Pesticides  Waste disposal  Clear-cut logging  Deforestation  Auto exhaust  Conservation  Recycling  Ozone depletion  Extinction of species  Populations explosion  Nuclear proliferation and testing Business Ethics - Gihan Aboueleish 47
  48. 50% waste diversion & 100% of Nova Scotians have curb-side recycling  Almost 79% return rate on beverage containers  Over 1.5 billion beverage containers recycled since April 1, 1996 & 403,000 litres of paint recycled since June 1, 2002  Over 912,000 tires are reused or recycled annually through the Used Tire Management Program. 5.5 million tires since the program began.  Total waste diverted from landfills annually: 350,000 tonnes & Composted more than 233,000 tonnes of organic material Business Ethics - Gihan Aboueleish 48
  49. Corporate Social Responsibility -the concern businesses have for the welfare of society.  Corporate Charity – charitable donations.  Corporate Responsibility – acting responsibly within society.  Corporate Policy –position on social and political issues Business Ethics - Gihan Aboueleish 49
  50. Japan has developed ―green technologies‖ and is exporting this technology - using ―green‖ as a competitive advantage  Some Canadian companies are exporting environmental technology  We have established IISD - the International Institute of Sustainable Development  Business continues to worry about the cost to institute ―green‖ operating procedures Business Ethics - Gihan Aboueleish 50
  51. American author, Paul Hawken, says that sustainable development is not enough  His proposals would make ―green‖ products cheaper ◦ Prices should reflect all costs including disposal and harm to the environment ◦ redesign products to make them biodegradable ◦ taxes on pollution and depletion instead of taxes on payroll ◦ redesign products to make them recyclable  Are we ready for these kinds of changes? Do we have any choice? Business Ethics - Gihan Aboueleish 51
  52. Many companies have undertaken a Social Audit - a systematic evaluation of the company’s position and progress on social issues  Shareholders and other stakeholders have actively encouraged companies to become proactive on social issues Business Ethics - Gihan Aboueleish 52
  53. Percent of Respondents Civic Duty Learn Issues/Problems Be With People With Same Ideals Be With People They Enjoy Improve Community Help People 0 20 40 60 80 100 Total is more than 100%- respondents could give more than one reason. Business Ethics - Gihan Aboueleish 53
  54. $9 $10 Individuals $12 Foundations Bequests $120 Corporations Business Ethics - Gihan Aboueleish 54
  55. New Charity Estimated Total Donor Given (in Causes Millions $25.6 Health & Bill Gates Education $6.6 Conservation & Gordon Moore Education James Stowers $1.5 Biomedical Research Eli Broad $1.045 Education & Arts Walton Family $.75 Education Business Ethics - Gihan Aboueleish 55
  56. o Merck $221.0* o Johnson & Johnson 176.2 o Pfizer 123.9 o Eli Lilly 121.4 o IBM 116.1 o Microsoft 104.7 o Intel 101.0 o Bank of America 91.5 * In Millions Business Ethics - Gihan Aboueleish 56
  57. Int'L Affairs $4.1 Environ./Animals $6.4 Umbrella Charities $11.8 In Billion $ Art/Culture $12.1 Health $18.4 Human Serv. $20.7 Education $31.8 Religious Charity $81.0 Source: BusinessWeek. Dec. 2, 2002 Business Ethics - Gihan Aboueleish 57
  58. Ethics Not Unique To U.S.- Leaders Accountable Demand for Socially Responsible Behavior Inter-American Convention Against Corruption Business Ethics - Gihan Aboueleish 58
  59. 1) Nokia Finland 2) Toyota Motor Japan 3) Sony Japan 4) Nestle’ Switzerland 5) Honda Motor Japan 6) BP Britain 7) Singapore Airlines Singapore 8) L’Oreal France 9) Royal Dutch/Shell Britain & Netherlands 10) Canon Japan Business Ethics - Gihan Aboueleish 59